1/21/17

Trump and real economy

I have no doubt that real economic growth in the USA does not depend on presidential opinion and action. On average, the US will be growing at a rate of about 2% in the long run. In 2017, a recession is possible, but it has no connection to Trump.

What Trump can change then? This is the question from both sides of the split nation. The complete answer is difficult to present in a post. I'll try to formulate some predictions, which are most relevant to my study.

1. Oil price depends on global processes and hardly to be corrected by Trump's energy policy. Hydrofracturing might become a cheaper technology because of lower expenses for environment protection.

2. Most of commodities (iron, non-ferrous metals, grain, etc.) are low now and will likely grow in the near future. It is good time to renew the US production capabilities. His plan to return production to the US is wise.

3. Competition with China is getting hot. China is a bigger US factory with cheap labor. All profit of cheaper labor is privatized by the top 1% of the US population. China cannot resist because its economy is not able to grow without the US market and investment.

4. The richest 1% is a big threat to Trump, however. Some of them are inside his administration. Bees against honey. Such conflicts are always resolved in favor of money, as Marx said.

5. Inflation will be low with low volatility. US administration does not affect prices.

6. Stock market will fall in 2017.

7. Labor force participation will be falling and the labor force participation will not be growing fast.

Very interesting blog. A lot of blogs I see these days don't really provide anything that attract others, but I'm most definitely interested in this one. Just thought that I would post and let you know.

Check these journals

DISCLAIMER

This is a personal site reflecting only my personal opinion. Statements on this site do not represent the views or policies of my employer, past or present, or any other organisation with which I may be affiliated